Statistics released by the Spark Cash Index (SCI), which measures cash withdrawals at more than 2,200 Spark Automated Teller Machines (ATMs) throughout South Africa, showed a month on-month increase of 0.03% in average cash withdrawal figures for October 2013 to R468.20.
Marc Sternberg, MD of Spark ATM Systems, says that the slight national increase was affected by a mixed bag of withdrawal activity and tight spending in certain sectors. "October's data almost mirrors September's withdrawal activity. Farming and leisure sites increased month-on-month, while retail, wholesale and petrol sites again recorded decreases in month-on-month activity. However, comparing regional activity, we note that the Western Cape recorded the highest month-on-month increase, possibly brought on by the seasonal change and a subsequent uptick in tourism, driven by a weaker rand."
"October is historically an 'in-between' month, falling in the middle of third quarter holidays and the end of year holidays, making it prone to reflect lower cash withdrawal values," says Ronel Oberholzer, principal economist at IHS Global Insights.
She says that although October's SCI data reflects slow growth she expects this to pick up in anticipation of the festive season. "The global economy is looking up, interests rates are still low, higher wages are being paid, lower petrol prices are expected and summer is almost upon us, so people will be more prone to spending."
Sternberg adds that SCI data for the second half of the year has illustrated some restraint in unnecessary spending, but he expects this to turn as consumers purchase goods early, in an attempt to circumvent festive season price increases.
"High living costs and the high level of debt have forced consumers to be more conservative and strategic with their cash withdrawal and spending habits. However, according to the latest BankservAfrica Disposable Salary Index (BDSI), those in formal employment have more cash in their pockets and disposable salaries increased nominally by 7.6% for the year up to September 2013."
"Quarterly employment data also reveals an increase in formal employment, so the build-up to the festive season, and an incoming stream of tourists, should start to positively affect the SCI data."
Oberholzer says that although the fundamental micro and macro-economic realities haven't abated there is optimism for the remainder of the year. "Labour turmoil is fading and schools and universities are starting to wrap up early this year. These factors should stimulate increased cash withdrawal activity."
